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  • Writer's pictureMichelle Marsh

Mastering Plan Documents for First-Time Sponsors

Updated: Apr 23

Welcome to the world of retirement plan sponsorship! As a first-time plan sponsor, you may be feeling overwhelmed by all the responsibilities that come with managing a retirement plan. But fear not! RPCSI is here to prepare you with the knowledge you need to navigate your new role with confidence and set your plan up for success! Today, we’re starting with one of the most fundamental parts of any retirement plan—the plan document. Let’s discuss.  

A plan document with the title page "retirement plan" sits on a desk with a pair of glasses, a pen, and a calculator stacked on top.

First Things First: What is a Retirement Plan Document?

Retirement plan documents are the written agreements which describe the terms and conditions of a retirement plan. In other words, it is the legal foundation and rulebook for the plan. Therefore, understanding and having a well-crafted retirement plan document is crucial for several reasons.  

Firstly, it provides certainty and clarity to plan participants about their benefits, right and features under the plan. Secondly, it helps plan sponsors fulfill their fiduciary responsibilities. Lastly, because it helps fulfill fiduciary responsibility, sponsor’s also stay compliant with the Employee Retirement Income Security Act (ERISA) and other applicable laws. This means safety from potential litigation and penalties.  


What Does a Plan Document Cover?

To ensure legal compliance and fulfill fiduciary duties, sponsors need both a well-crafted plan document, and the ability to understand it. Let’s look at what’s covered. 


Name of the Plan Administrator and Other Fiduciaries

This section identifies the Plan Administrator and any other named fiduciaries involved in the claims procedure for deciding benefit appeals. It details their roles, responsibilities, and authority within the plan's administration and decision-making processes. 


Eligibility Requirements

This is where the criteria employees must meet to become eligible to participate in the retirement plan lives. It covers requirements like age, length of service, and employment status. It also explains how employees can enroll in the plan, whether it's through automatic enrollment or an opt in election form. 


Contribution Limits

The contributions section explains the rules and options for employee and employer contributions to the retirement plan. It outlines whether contributions are mandatory or voluntary and provides details on how the contributions are calculated. This section may also include information about catch-up contributions for participants aged 50 and over. Including employer matching or profit-sharing arrangements is also outlined in this section.  

puzzle pieces being held close together by multiple hands.

How contributions are handled is important information included in plan documents.


Description of Benefits Provided and Cost of Coverage

The benefits provided by the plan, include retirement savings options, rollover options, and conversion options and any other benefits offered are listed in the plan document. It also specifies how much the participant may contribute towards their retirement and what the employer will be contributing either on an optional or mandatory basis.   



Vesting rules determine when employees become entitled to the employer's contributions made on their behalf. The vesting section specifies the vesting schedule, which may be based on years of service using a cliff or graded schedule approach. 


Distribution Rules

This explains the circumstances under which participants can access their retirement savings. It covers events such as termination, death, disability and retirement. Additionally, optional in-service distributions are defined for the plan in this section as well.   The plan document will specify the process for requesting a distribution, including any necessary paperwork or documentation.  


Standard of Review for Benefit Decisions

This section details the standard of review applied to benefit decisions, including the process for reviewing and resolving benefit claims or appeals. It may specify the level of discretion given to the plan administrator or named fiduciaries in making benefit determinations. 


Plan Sponsor’s Amendment and Termination Rights

Part of the plan document covers the sponsor's rights and procedures regarding plan amendments and terminations. It specifies the process for making plan changes, including participant notification requirements, and addresses the disposition of plan assets in the event of plan termination. 

Plan document amendments being discussed by fiduciaries at conference table.

If the plan is ever altered, the plan document outlines how amendments should be conducted.


TPA or Committee Administrative Duties

Procedures for allocating and designating administrative duties to a Third Party Administrator (TPA) or committees are also outlined. This part of the plan document details the responsibilities and authority of the designated parties in plan administration. 



This plan document specifies how the retirement plan is funded, including employer and/or employee contributions, funding sources, and the investment vehicles used to accumulate and manage plan assets. 


Closeup of "IRS" logo on their official website

The IRS offers resources for plan sponsors seeking more information regarding responsibilities, compliance, and more.

For further details regarding what information should be in your plan document, check out the IRS checklists for retirement plan documents categorized into subject matter packages. 


Note the Difference: Plan Document vs. Summary Plan Description

It's crucial to understand the difference between a plan document and a summary plan description (SPD). While the plan document is a comprehensive legal document, the SPD is a plain-language summary that highlights key plan features for participants. 

Plan documents are not automatically required to be distributed to participants; however, they do have the right to request a copy. According to PLANSPONSOR, “the plan sponsors must provide it within 30 days of being requested.” However, an SPD must be sent to participants within 90 days of being covered under the plan, when requested, and once every 5-10 years if there have been plan amendments.  


Let RPCSI Help You with Your Plan Document and More!

As a first-time plan sponsor, navigating retirement plan documents may seem daunting at first. However, understanding the importance of these documents and the guidance they provide is crucial to your success as a plan sponsor. Always remember that seeking professional assistance from experts like RPCSI can make the process easier. We'll help you create a well-crafted retirement plan document so you can confidently fulfill your fiduciary responsibilities and provide a solid foundation for your employees' financial future. Learn more about how RPCSI’s document services can help you achieve your goals. 

Looking for more guidance as a new plan sponsor? Check out our 5 key tips for beginners!  

Retirement Plan Administrator certifications: why are they important? Find out in our certifications guide! Click here to download.


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